Pre owner and software developer Joey Hess kicked off the controversy when he noticed his phone was sending back information like his location, details on application crashes, how long applications were used for and even a list of third party apps installed on his phone.
The update was sent daily to Palm over a secure connection.
It also said it "offers users ways to turn data collecting services on and off", even though Hess said he only managed to disable the process by editing the phone's software – not something your average phone user will know how to do.
Palm finished off its defense by saying: "We appreciate the trust that users give us with their information, and have no intention to violate that trust".
But is it too late? Let us know what you think to this debacle, and be sure to check out our Palm Pre review to see what all the fuss was about.